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(By Ashit Gulati) Recently, Microsoft exhibited its intent on acquiring the struggling phone maker Nokia. The Finnish company once was a market leader in mobile devices; however, over the last few years it has consistently struggled to sustain its market share; hence, its present market value dropped by 30% to approximately $14.5 billion.

During 2011, Microsoft and Nokia entered into a billion dollar deal, where Nokia agreed to use Windows phone as its primary smartphone platform.

If Microsoft acquired Nokia, the software giant could gain access to Nokia's mobile patents, distribution channels, manufacturing facilities and hardware expertise. This can allow Microsoft to rollout its own ground breaking windows phone loaded with collectively patented technologies. Many believe such a combination could produce a new superpower in the world of smart phones.

However, it will be interesting to examine if BlackBerry would make more sense for Microsoft.

Why BlackBerry Could be a Better Target

Nokia's market share in the emerging economies has declined consistently over the last few years. During 2008, Nokia's market share peaked at around 45%; however, it has dropped below 15% since then. During the first quarter of 2012, Samsung surpassed Nokia, as the global leader in mobile phone shipments. Although, Apple dominated the high-end smart phone market, Nokia had held the crown for fourteen years.

According to Gartner, during the first quarter of 2013, Nokia's mobile phone share declined 4.9% points predominantly due to a drop in feature phone sales. Additionally, Nokia's position dropped from 8th during the fourth quarter of the previous fiscal to 10th in the first quarter of 2013. Even though, Nokia's windows phone exhibited a marginal improvement in sales; nonetheless, Nokia has struggled to report any consistent growth in the smart phone segment.

In contrast, BlackBerry looks set to invade the emerging markets with its low end smartphones. Recently, the phone maker launched BlackBerry Q5, which was a much awaited replacement to its extremely popular low-end smart phone: BlackBerry Curve. Going forward, the company will look to regain profitability through its high-end mobile devices while stopping the subscriber loss through its low end QWERTY phones.

Furthermore, according to Gartner, during the first quarter of 2013, BlackBerry held third position in the global smartphone sales to end users by operating systems, right behind Android and iOS, and just ahead of Microsoft. Although, like Nokia BlackBerry has also experienced its own share of problems with heavy subscriber loss.

It is noteworthy that BBM is now available on platforms such as, iOS and Android, hence, BlackBerry cannot expect to add new subscribers on the grounds of exclusivity as it did before. According to the valuation offered by Trefis, with falling sales of its handsets, BlackBerry services add more value to its stock, which now accounts for approximately 30%.

At present, BlackBerry's market value stands at around $7.3 billion, with maximum revenues generated through BlackBerry phones at around 60%, which is followed by BlackBerry services at around 33%.

It is noteworthy for potential investors that during the fourth quarter of previous fiscal U.S. accounted for less than 26% of BlackBerry's revenues and just 11% of overall shipments. I believe, if Microsoft is unsuccessful in reaching an acquisition agreement with Nokia, then BlackBerry could be a potential target for the company based on a strong and dedicated subscriber base of 76 million and growing presence in international markets

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